What are family offices?
Family offices are private wealth management advisory firms that serve high-net-worth investors. They are different from traditional wealth management shops in that they offer a total outsourced solution to managing the financial and investment side of an affluent individual or family.
Family Offices are broadly classified into two parts:
- Single-family Office (SFO): SFO is an organization, which is created to support the financial needs of a specific family group.
- Multi-family Office (MFO): MFO is an organization that provides family office services to more than one family group. It also provides a similar range of customized services by the single-family office, but without the need to set up an individual family office infrastructure.
Why should Startups raise money from Family Offices?
Family Office Investment are different from Venture Capital in that venture capitalists raise funds with a 10 to 12 year lifecycle and focus exclusively on building a diversified portfolio of multiple early-stage companies, whereas family offices have “evergreen” capital or loan. And, Family offices do not have an investment horizon. Venture Capitalists compete for deals through PR (Press Release), Marketing, Fund Sizes, and News about portfolio companies whilst family offices value discretion and confidentiality irrespective of how active they are in their investments.
Family Office Investment is Right for your startup if you need a relatively large quantum of growth equity or debt, and you prefer the patient variety, complete with investors who will be in it for the long haul. It’s also good to be involved with FOs if you need to build a halo effect in order to attract talent that is not a requisite for your business model.
All in all, FOs specifically offer startups a strong entrepreneurial orientation in DNA or background, or specific expertise and advice alongside patient capital.
What do family offices bring to the table?
Our Value add to any company comes in three forms:
- Expertise in scaling a business – Our principal is an entrepreneur himself, having successfully run, scaled, and exited two tech companies, and seen his fair share of failures. We can help you with the do’s and don’ts of scaling a business.
- Expertise in the India Market – Having run our business in India, we have an in depth understanding of the market and how India works. If you are a global startup looking to some day enter India, or an Indian startup looking to crack the puzzle, we can help.
- Connects to the right people – Through years of entrepreneurship and investing experience, we have built a trusted network that can enable our portfolio companies to scale rapidly. We can connect you with the right partners to enable and expand your business.